Financing

As a loan for repairing your flat, you can receive up to 85% of the cost of your flat (without additional money investments). If you have decided to build a house, you can receive a loan in the amount up to 85% of the market value of the future real estate, i.e. the cost of the real estate upon completion of construction works. In this case, the loan will be paid in instalments in accordance with the construction process.

Minimum loan sum – 1 000 LVL.

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What will the interest rate be in my case?

The interest rate depends on many factors: chosen currency, term of inter-bank rate, loan sum, your income, loan term and whether it is flexible or fixed.

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What is the loan term?

The loan term is from 1 up to 40 years.

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What bank and additional charges shall I take into account arranging a mortgage loan?

The bank charges only a single payment for preparation of monetary funds (price list). This payment can be executed from the loan sum. However, it is necessary to take into account additional non-bank related payments.

Evaluation of real estate – 40-170 LVL

11 LVL – clerical fee; 0.1% of the loan sum – state fee for loan registration. These are payments for registration at Land Registration Book. Payments related to State land authority are set by the Ministry of Law and have a tendency to change regularly.

Notary fee – from 12 LVL

Insurance – policy price depends on the property insured.

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How fast will a loan application be considered? How long takes arrangement and allocation of a loan?

Decision on loan allocation is usually taken within 1-4 working days. Upon approval of a loan with the customer, agreements are approved and singed. Changing of proprietary rights at Land Registration Book can take up to 4 weeks, mortgage registration – 1 week (usually these procedures are done at the same time). After the mortgage registration and arrangement of insurance (the bank offers IF Latvija insurance that can be arranged at your consultant), money, as a rule, is transferred to a customer's bank account within 1 working day.

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What income do I need to receive a loan?

The monthly loan payment should not exceed 35% of the monthly income of a loan-subscriber. Income of other family members as well as income of guarantors is taken into account.

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Is there a possibility to repay a loan ahead of schedule?

Yes! It is possible to repay the whole or a part of a loan ahead of schedule any time without any charges.

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What is the best currency for the loan?

It is advisable that a currency of a loan should be the same as a currency of your income. A loan in the other currency is related to currency risk – in case of currency exchange rate fluctuations, it is possible that the sum of your loan at conversion into lats in future can increase significantly. For example, 100 years experience of Finland and Sweden shows that many loan-subscribers, at the increase of the rate of a dollar as to the local currency, were not in a position to repay their loans and lost their property. Moreover, you lose money monthly for conversion.

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What are RIGIBOR, LIBOR and EURIBOR?

RIGIBOR is an inter-bank rate – an arithmetic average that is calculated from the quotations of interest rates of the largest Latvian banks. Inter-bank rates are calculated daily for the certain period, for example, for 1 week, 1 month, 3 months, etc. LIBOR and EURIBOR are also inter-bank interest rates calculated by London Bank Association and Central European Bank. These inter-bank rates reflect the objective money value on the market.

Inter-bank rates are the same for all the customers in Latvia.

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What do you need to do in case the decline in household income creates a danger to timely repayment of a credit?

No matter what are the reasons for decline of your household income, you need to inform the bank promptly, especially when you might experience problems with making the monthly payments. The bank will offer the best solution to avoid the critical situation. There are several options allowing postponing or reduction of the monthly payments. It is important that you state your real financial situation, so we could together find the most appropriate option. The bank is interested in helping its clients, because it creates successful partnership and helps to avoid losses. Credit debts hurt both – the client and the bank!

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What are the solutions offered by the bank in case the credit payments are delayed?

In case of payment delays the bank will offer several options to ease the financial burden on the household. The choice is wide – capitalization of debt, extension of the credit loan term, delay or reduction of the payments of the principal, lower interest payments. Each option will lower the ongoing monthly payments; however, keep in mind that paying less today means paying more in the future.

Each case is special, therefore, every option must be considered together with the bank.

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What happens when the clients experiencing difficulties repaying the credit do not inform the bank?

If the bank does not know about the difficulties you are experiencing, be ready for the late payment penalties instead of the bank's forthcoming. Moreover, the situation can result with legal suit against your property in a period from two to six months. You will also have to cover the legal costs and the difference between cost of your property and your credit obligations. The information about the late payments will be sent to the Credit Registry of the Republic of Latvia. Lack of cooperation with the bank will bring the financial losses to you and will complicate the financial transaction in future.